Sainsbury’s ‘savvy shopping’ offer boosts sales
Sainsbury’s move to match the “savvy shopping” habits of its customers with Nectar data, an improved own label offer, its Brand Match initiative and the de-escalation of short term price promotions helped it outperform the big four supermarkets once again in its second fiscal quarter.
Sales at stores open for a year or more excluding fuel grew 2.1 per cent in the 16 weeks to 28 September, despite strong comparatives in the same quarter last year when the supermarket benefited from its sponsorship of the Paralympic Games.
In its most recent quarter Sainsbury’s looked to emulate the success of its Paralympic Games sponsorship with its support of the British Athletics Paralympic Programme, which included the inaugural Sainsbury’s Summer Series and Sainsbury’s Anniversary Games, held at the Queen Elizabeth Olympic Park in July.
Sainsbury’s own branded offer continued to grow at more than twice the rate of branded goods, with Taste the Difference and the recently relaunched By Sainsbury’s mid-tier range among the key performers in the quarter.
The grocer’s online business grew by 15 per cent in the period and is now worth more than £1bn in annual sales. Elsewhere, its convenience business grew by 20 per cent year on year as customers topped up their shops more frequently during the warm summer months.
Sainsbury’s CEO Justin King said on an investor call today (2 October) customers continued their behaviour of “savvy shopping” in the quarter, which the supermarket matched with “unique tools” such as its Brand Match coupons at the till, Nectar data and its own label offering, “helping customers live well for less” – the strapline of its ongoing brand marketing campaign.
Mike Coupe, Sainsbury’s group commercial director, said the supermarket – along with the rest of the sector – has been dialling down its level of promotions as it looks to improve margins. Sainsbury’s is “fundamentally changing [its] trading strategy” to stabilise prices for customers to see “continuous value day in and day out”, he added.
Sainsbury’s is the only “big four” supermarket in the UK that has been able to hold and grow its share of the sector in recent months. Kantar Worldpanel figures for the 12 weeks to mid-September showed its market share increased to 16.6 per cent from 16.4 per cent a year ago.
John Ibbotson, director of retail consultants Retail Vision, says the brand has perfected a “delicate balancing act”.
“Rocketing sales of its Taste the Difference own label are evidence of its ability to poach the middle classes from Waitrose, while its attractive stores also excel at luring customers from the fast-improving discounter Aldi,” he adds.
Sainsbury’s 35th consecutive quarter of sales growth was ahead of Tesco, which reported flat like-for-like sales in the period.
Read recent research on how customers rank the “effort” needed to shop at supermarkets here.
